Sterling held near a one-week low today as Brexit negotiations appeared to have stalled before a crucial European Union summit later this week.

Negotiators from both sides have been locked in talks this week to overcome differences on the biggest outstanding hurdle to a deal – how to keep the UK frontier with the Irish republic free of border checks after Britain leaves the EU in March.

EU negotiator Michel Barnier said after meeting British Brexit Secretary Dominic Raab that they could still not bridge a gap between his “backstop” demands that Northern Ireland stay in the EU’s economic zone if there is a risk that border checks with EU member Ireland could revive conflict, and London’s rejection of any checks on trade between the province and the British mainland.

Despite the weekend news, markets appear fairly more comfortable that some sort of agreement will be reached at the EU summit later this week and we should see sterling supported.